IEA projects 25% copper supply deficit by 2035 despite record prices and new African projects

The International Energy Agency (IEA) projects that the global copper market could face a supply deficit of around 25% by 2035 based on the current pipeline of existing and announced mining projects, according to its Global Critical Minerals Outlook 2026 released in July 2026 (IEA executive summary).

This represents an improvement from the approximately 30% shortfall projected in the previous year's Outlook. The narrowing of the gap stems from new projects advancing, particularly in the Democratic Republic of the Congo (DRC) and Zambia (IEA Outlook section). The IEA notes that these African developments, along with contributions from places such as Peru and Canada, have boosted expected mined supply relative to earlier assessments.

Copper demand is set for significant growth, driven by its essential role in electricity networks, electric vehicles, renewables, construction, industry, and data centres. In the Stated Policies Scenario (STEPS), copper records the largest volume growth among key minerals, adding about 7 million tonnes by 2040 (IEA Outlook). Primary supply requirements are calculated as total demand net of secondary supply (recycling) and accounting for refining losses. Expected supply from announced projects covers only about 75% of those requirements in the base case for STEPS by 2035.

Despite the improved outlook, the IEA emphasises that a sizeable structural shortfall remains. Challenges include declining ore grades (average global grades have fallen substantially over decades), rising capital costs and project complexity, limited new resource discoveries, and long lead times of around 17 years from discovery to production. Many projects face delays, cost overruns, financing constraints, permitting issues, and geopolitical risks (IEA copper commentary).

Copper prices have hit record highs, briefly exceeding USD 14,500 per tonne intraday in early 2026 after surpassing USD 12,000 in late mid-2025, supported by supply disruptions, inventory builds, electrification demand, and financial factors (IEA commentary). Investment by copper-focused companies rose 8% in 2025 even as overall critical minerals investment declined 9%, reflecting confidence in long-term demand.

However, the midstream sector faces pressures. Smelter treatment and refining charges (TC/RCs) have fallen to record lows, including a USD 0 per tonne annual benchmark in 2026, due to rapid Chinese smelter capacity growth outpacing concentrate supply. China now accounts for about half of global smelter output. Some custom smelters outside China have cut production or received support, while by-product revenues from gold, silver, and sulphuric acid have provided temporary buffers (IEA commentary).

Africa's role is growing. The DRC and Zambia are expected to add hundreds of thousands of tonnes of capacity, with the DRC benefiting from oxide deposits and Chinese investment in projects like expansions at Kisanfu, and Zambia from projects such as Barrick's Lumwana expansion. Still, vulnerabilities remain, including dependence on sulphuric acid for leaching in parts of DRC production and risks from supply chain disruptions (TrendsNAfrica report on IEA findings).

The IEA highlights that meeting demand will require accelerated investment in mining, greater recycling, material efficiency, substitution where possible, and efforts to diversify supply chains. While secondary supply is expected to grow, primary mining remains critical. The agency notes similar but differing dynamics for other minerals, with lithium also facing deficits (though improving) and cobalt seeing widened gaps due to DRC export quotas.

These projections underscore copper's position as a potential bottleneck for the energy transition and broader electrification, even as prices signal market tightness and some project progress materialises.